With its core real estate development and property
management focus in the heart of the booming state of Texas, Cherubim Interests
continues to benefit from what is argued by many analysts to be the nation’s
best state economy. Even with slumping energy prices putting downward pressure
on one of the state’s major sectors, the Texas economy continues to roar,
posting 5.2% growth last year (more than double the national average), second
only to North Dakota. However, unlike North Dakota, Texas is showing exceptional
resilience in the face of lower lows in the energy market. This reflects the
state’s sheer size, low unemployment and surprising economic diversity, with
sectors like tech and transportation continuing to attract huge volumes of new
residents.
With a business model that features targeting solutions like
raw land acquisitions that have the potential for redevelopment, as well as a
great deal of experience resident in the company’s management/directors when it
comes to handling alternative, commercial, single and multifamily projects,
CHIT is able to truly deliver on its broad-spectrum approach to real estate
development. This broad-spectrum approach, which runs the gamut from initial
discovery and due diligence, through construction and on into property
management, has helped mature this relatively small company into what could
eventually become one of the real estate industry’s major regional leaders.
CHIT’s emphasis on the so-called Texaplex region of Texas,
the central area between the Dallas-Fort Worth Metroplex up north, Houston in
the southeast and Austin/San Antonio in the southwest, which contains over 75
percent of the state’s population, makes a great deal of economic sense for the
company. For instance, in Austin, which has very little exposure to the energy
sector, data from the Federal Reserve Bank of Dallas’ beige book released back
in July indicated that May job growth increased at an annual rate of 6.6%, with
high-paying scientific and technical services jobs being noted in particular as
a key driver of said growth.
Home to roughly 20 million or more people, the Texaplex is
an ideal location for the company to apply its de-risked approach to the real
estate market, and CHIT’s recent announcement that it is moving to acquire
income-producing properties via the creation of a class of Convertible
Preferred Stock has many analysts with their ear to the ground, eagerly
awaiting the disclosure of the company’s initial target location. Many analysts
are predicting Cherubim Interests will go with targets in the Texaplex region,
selecting opportunities there from out of the wide array of locales the company
has been vetting, in order to minimize outlays and maximize shareholder upside.
Adding to the de-risked nature of the company’s approach to
real estate development is Cherubim’s second major growth vector, a leasable,
proprietary controlled environment cultivation technology designed to give
growers an edge in the burgeoning $2.7 billion legal cannabis market. Developed
through the company’s BudCube Cultivation Systems USA subsidiary, the BudCube
is an innovative, self-contained grow system for marijuana or any other type of
plant, such as high-value organic produce, which strips away the substantial
logistical barriers to entry that many growers face. Completely scalable, the
BudCube system is perfect for either large-scale applications or micro grow
ops, and CHIT is taking a very aggressive approach to the space, with plans to
simply lease these turn-key cultivation systems to clients.
Armed with a real estate development capability, CHIT has
the capacity to set up shop anywhere marijuana is made legal, and can really
make a name for itself in this yet-nascent industry by helping growers avoid
the high costs of building out new infrastructure. After all, why build when
you can lease existing square footage and then just drop in hardware,
simultaneously ensuring that key objectives are met, such as site security,
high strain purity in the finished product and a lack of contamination from
insects, molds or chemicals. The idea to strip the grow model down as far as
the level of personal storage units is ingenious, putting an extreme amount of
highly valuable flexibility into the hands of growers, even as more and more
states continue to pass groundbreaking legislative reforms on cannabis
production/consumption.
With a BudCube-based cultivation model, growers can be up
and running, generating revenue from the first season’s crop, in the time it
would otherwise take to set up new facilities, and get everything moved in.
With an initial beta testing launch facility already in the offing up in
Oregon, where recreational marijuana was recently approved ahead of schedule,
BudCube could rapidly develop into a go-to controlled environment cultivation
tech for the sector, and longer term this technology could provide a turn-key
solution for controlled organic produce farming as well.
As states across the country continue to repeal marijuana
prohibition put in place by what are now antiquated federal regulations, the
opportunity for CHIT will only grow exponentially, and the company’s
exceptional execution time should give it a decided edge in beating out
competing solutions.
Learn more about Cherubim Interests by visiting
www.cherubiminterests.com
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